Published: July 13, 2025, 01:11 AM
Bangladesh’s readymade garment (RMG) industry, the second-largest in the world after China, is facing growing concerns over its global competitiveness - particularly against Vietnam - due to rising U.S. tariffs and sluggish export growth.
In 2024, Bangladesh’s RMG exports grew by a meager 0.21 percent to $38.48 billion, while Vietnam posted an impressive 9.34 percent growth, reaching $33.94 billion. With only a narrow margin separating the two, analysts warn that Bangladesh could soon lose its second-place global ranking to Vietnam if urgent policy actions are not taken.
A major contributing factor is the disparity in U.S. tariff rates. The United States recently imposed a 35 percent tariff on Bangladeshi RMG products, while Vietnam secured a reduced rate of 20 percent through a trade agreement. Industry leaders argue that this uneven tariff regime is skewing the playing field.
Md Mohiuddin Rubel, former BGMEA director and Managing Director of Denim Expert Ltd., pointed out that Vietnam, despite having a trade deficit of $124 billion, enjoys lower tariffs than Bangladesh, whose trade deficit is just $6.2 billion. “This discrepancy puts Bangladesh at a serious disadvantage, especially since the U.S. is our largest export market,” Rubel said. “Without tariff relief, we risk not only reduced orders but also potential job losses and broader economic instability.”
According to the World Trade Organization, Bangladesh`s share in the global RMG market dropped from 7.38 percent in 2023 to 6.90 percent in 2024, while Vietnam`s rose to 6.09 percent. China, although still the market leader with $165.24 billion in RMG exports, saw its market share dip slightly from 31.64 percent to 29.64 percent.
Other competitors such as India, Cambodia, Pakistan, and Indonesia have all experienced notable export growth in 2024. Cambodia led with 24.19 percent growth, followed by Pakistan (21.44%), India (6.5%), and Indonesia (4.67%). Among major exporters, only Turkey saw negative growth.
On July 8, U.S. President Donald Trump announced new tariffs on 14 countries, including Bangladesh, Cambodia (36%), and Indonesia (32%). While Bangladesh faces a 35 percent tariff, industry experts warn that any additional advantage given to India or Pakistan could further erode Bangladesh’s competitive edge.
Fazlee Shamim Ehsan, Executive President of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), echoed this concern. “It’s not just about our own tariff rate,” he said. “If three of our four major competitors - China, Vietnam, India, and Pakistan - secure lower tariffs, it will become a serious problem.”
The stakes are high. Analysts estimate that if Vietnam continues to enjoy preferential access, it could cost Bangladesh up to 20 percent of its export orders. If India and Pakistan also benefit from favorable trade terms, the impact could be even greater.
With global attention now focused on tariff negotiations, Bangladesh is under increasing pressure to strike a deal with the U.S. that levels the playing field. Without it, the country’s hard-earned position in the global RMG market could be in jeopardy.
